As people face rising food and housing costs, there is one place where households can stretch their dollars by taking a hard look at home energy bills.
OneRoof spoke to experts on how homeowners can keep down electricity bills – from old-fashioned draft excluders on doors and windows to changing power-wasting behaviour.
The Reserve Bank of New Zealand predicts currently that consumer price index [CPI] inflation will peak at 7.5% this year before falling to 3.8% in 2024, and that includes energy prices.
One good piece of news for consumers is that the cost of power is very unlikely to rise more than inflation, says energy analyst Grant Swanepoel, director of equity research at investment bankers Jarden.
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“Residential prices have a very big political overlay. So, in effect, it's very difficult for generation retailers to raise prices more than inflation.” In fact it might even be difficult for retailers to raise prices at the same rate as inflation.
Swanepoel says he doesn’t expect to see electricity prices falling until extra generation capacity that is being built currently comes online. “Prices should remain at these higher levels at least until late 2024,” he says.
“While this is not advice, look for the best contracts you can get where you’re locking in your electricity [prices], because they’re not going to come down in the next year, or year and a bit.” Energy companies offer discounts to customers willing to sign up to a contract.
At the more expensive end of the scale, homeowners could beef up insulation and install double-glazing to reduce energy consumption. Photo / Getty Images
While cash-strapped New Zealanders struggle to pay rising power bills as the cost of living balloons, there are many simple steps to help hold costs down.
Be mindful of energy usage
Is it necessary to have the heating or cooling on? Would it be better to cook meals in bulk, or use an air fryer instead of the full oven? Can the washing machine run on cold water?
That simple step saves $100 per year, says Paul Fuge, of Consumer NZ’s energy price comparison service Powerswitch.
Fuge points out that water heating is one of the big energy users in a house. Running the washing machine for full loads can also reduce cost, while drying clothing outside, rather than running the dryer, is also a good money saver.
“If everyone in a house of four can cut their showers to five minutes [the family] will save $10 a week,” says Fuge, although he accepts that some consumers struggle to change their behaviour.
Keep room temperatures within a sensible range
People who crank the heat up in winter, or down in summer tend to use more power than those who take the edge off the ambient temperature by a couple of degrees. Some heat pump users prefer to use the dehumidifier setting only, which can cut costs.
Sweat the small stuff
Simple DIY around the house can add up to noticeable savings in energy usage – things like a $20 door strip, a $5 window seal or cheap double glazing film can help. Switching to LED bulbs can save over $100 a year, and turning appliances off at the wall saves another $100 for the average household. Appliances such as printers left on at the wall constantly use electricity. Even reducing the amount of water boiled in a kettle can save $25 a year, according to Consumer.
Game the power bill
Try to use the power company’s app to dig down into power usage in the home to help change behaviour. For example, if the company offers free power hours or low peak times, align power using activities with the peak times you’re using power. Switch to another company that offers deals to suit or make a game of trying to reduce power usage.
Buy energy-saving appliances
When it is time to upgrade appliances, look for those with higher energy star ratings that cost less to run. The government’s Genless website has a useful calculator to compare appliances.
Consider big-ticket items when money permits
Big-ticket upgrades such as double or secondary glazing, more insulation, solar power or water heating, and wetback fireplaces that heat water, can reduce power bills longer term. They have a big upfront cost, so won't necessarily work for people who need to spend less now.
Shop around for a better deal
Power comparison websites such as Powerswitch are good for a first pass, although Electric Kiwi and Octopus Energy aren’t currently on Powerswitch. Fuge says power customers who switched in 2022 saved $385 per year on average, but points out that the more customers know about their own energy usage and behaviour, the better these comparisons will be.
Some deals work better for different households. Changing the time appliances such as dishwashers and dryers are run doesn’t work for every household, while others may prefer prompt payment discounts or free hours of power.
